On Tuesday, Baird maintained its Neutral rating on VeriSign (NASDAQ:VRSN), with a steady price target of $200.00. The firm anticipates that the company's third-quarter results will align with expectations, and it projects a possible narrowing of the full-year 2024 domain name guidance.
The firm noted VeriSign's recent investments in channel marketing, suggesting that while these efforts may eventually boost domain performance, any significant improvements are not expected immediately. VeriSign's domain numbers have been declining weekly, but these declines remain within the forecasted range.
Baird commented on the upcoming .com contract renewal for VeriSign, acknowledging it as a slight concern for investor sentiment in the short term. However, the expectation is that the contract will be renewed under the same terms and conditions. The firm highlighted that the current valuation of VeriSign stands at approximately 18.5 times the next twelve months' free cash flow (NTM FCF).
Looking ahead, Baird pointed to domain stabilization and the certainty of contract renewal as potential factors that could influence the company's performance as the year comes to a close. The firm's stance reflects a wait-and-see approach, considering the current market valuation and pending developments within VeriSign's operations.
VeriSign, which operates a diverse array of network infrastructure, including two of the world's 13 Internet root servers, is a key player in the domain registration industry. The company's financial health and contract negotiations are closely watched by investors and industry analysts alike, as they can significantly impact the company's future revenue streams and market positioning.
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